1 Economic factors in aviation

2 Main economic factors Airline income Airline cost Break-even load factors Seat configuration Overbooking Pricing Scheduling Fleet planning

3 Airline income Where the money comes from 75% comes from passengers 15% comes from cargo shipper especially Postal service 10% comes from other transport-related services

4 Airline Costs Where the Money Goes 27% Flying operations 13% Maintenance 16% Aircraft and traffic service 13% Promotions and sales 9% Passenger service 10% Transport related 6% Administrative 6% Depreciation/Amortization

5 Break-even load factors the percentage of the seats the airline has in service that it must sell or price of the tickets to cover its costs vary from one airline to another Overall, the break-even load factor for the airlines in recent years has been approximately 66%

6 Seat configuration Depends on the airlines marketing strategy Size and construction of the aircraft Type of transport Bussines/economy class

7 Overbooking, pricing, scheduling Airlines occasionally overbook flights Making price of the tickets and freight rates in response to both customer demand and the prices of competitors –different prices of the tickets Planing the flights –more important than price –depends on demands of the market

8 Fleet planning Selecting the right aircraft Newer aircraft are more efficient and cost less to operate than older aircraft Productivity gains must be weighed against the cost of buying a new aircraft Sometimes, airline planners determine their company needs an aircraft that does not yet exist

9 Energy efficiency

10 Aircraft configuration of the future Reduce drag Increase lift Decrease consumption Biofuels offer

11 Interesting websites http://www.iata.org/whatwedo/Documents/ec onomics/aviation_economic_benefits.pdfhttp://www.iata.org/whatwedo/Documents/ec onomics/aviation_economic_benefits.pdf http://www.avjobs.com/history/airline- economics.asphttp://www.avjobs.com/history/airline- economics.asp http://aviationbenefitsbeyondborders.org/eco nomic-growth/overviewhttp://aviationbenefitsbeyondborders.org/eco nomic-growth/overview